Personal Finance Bloggers' Stock Picking Contest 2009

The Financial Blogger had asked a bunch of other personal finance bloggers if they wanted to participate in a stock picking contest for 2009. The criteria was to pick four securities in equal dollar amounts listed on a Canadian or American exchange (not including derivatives) to just sit on for the duration of 2009 with no changes allowed. We are to provide updates every quarter and the contest ends on the last trading day of 2009. The initial prices will be based on the closing prices of December 31st, 2008 (i.e. yesterday).

I Shy Away From Talking About Individual Picks

I initially hesitated since I was worried that some readers might take some of these picks to heart and actually buy them themselves as part of their investment portfolios. However, I decided to participate anyways deciding that I’ll just disclaimer the heck out of it. To that end:

This Is Just For Funsies

THIS STOCK PICKING CONTEST IS JUST FOR FUN, IT IS NOTHING MORE THAN GAMBLING. DON’T EVEN THINK ABOUT BUYING THE STOCKS LISTED HERE OR ON ANY OF THE OTHER BLOGGERS’ SITES WITHOUT FIRST CONSULTING A PROFESSIONAL FINANCIAL ADVISOR. IF YOU BUY THEM ANYWAYS, YOU MUST RAISE YOUR RIGHT HAND BEFORE PLACING THE ORDER AND REPEAT, “I AM A NUTBAR”.

Okay, with that now having been made clear, here are my four picks for this contest (in no particular order).

1. Direxion Small Cap 3x Shares (TNA.us)

This is an ETF that seeks to track 300% of the daily price movement of the Russell 2000 Index, which is a proxy for Small Cap US stocks in general. My decision on this one was based on the data which supports small caps leading the way out of a bear market before the general market. If that is indeed the case and 2009 shapes up to be a good year for small cap US stocks, this thing will fly. Plus, the ticker symbol is TNA. :P

Purchase Price: $34.09/share

2. Direxion Emerging Markets 3x Shares (EDC.us)

Similar to the first pick, this is an ETF that provides 300% built-in leverage, only this time the underlying index is the MSCI Emerging Markets Index. This pick is simply a contrarian bet, and I’m hoping that since emerging markets were clobbered in 2008 they may have the most bounce in 2009. (Can you see how professional I’m being?) :)

Purchase Price: $51.94/share

3. Enablence Technologies (ENA.tsx-v)

Enablence Technologies is based in Ottawa and to sum up in a nutshell the story behind this pick: The internet is said to be experiencing an “exaflood” which means that traffic and bandwidth demand is growing exponentially due to video sharing and other new technologies. There is a bottleneck that needs to be alleviated in that data can flow well up until it gets to your house (that’s where the bottleneck is). Enablence has the technology that basically opens up that bottleneck. News coupled with a turn in the markets could make this a 10-bagger in the next few years. Or you could lose money on it. You know how it goes…

Purchase Price: $0.30/share

4. Horizons BetaPro Nymex Crude Oil Bull Plus ETF (HOU.tsx)

This ETF seeks to track 200% of the daily price movement of the Nymex Crude Oil Index – in other words it’s a leveraged bet that oil will go up in 2009. While I’m a fan of low fuel prices, I could see oil prices more likely to move up than down from where we are now over the next 12 months.

@ Mark – quite right, they should really only be used for trading positions or you need to constantly buy/sell units in order to keep a long term 2x or 3x correlation. OR you’re trying to swing for the fences and hope the market only goes up… lol

I don’t know that I would chose the last one at the beginning of the year, as I still see a bit of downside pressure to the oil sector. I believe that by years end, we could well see oil in the 45 to 75 range (further out it could be double that) but for the first half of 09, I believe oil will go lower, perhaps near the 25 to 28 range.